Martin Vander Weyer/The Spectator
AI, tax, and bad education are to blame for the collapse in graduate hiring, not ‘job-blockers’ working past their sell-by-date
Fifty years ago this week, I started in the City as a graduate trainee. Three months later, the IMF arrived in London to bail out a profligate Labour government with a chancellor called Healey. The UK economy was flat on its back. Yet almost all my university friends came through what was then called “the milk round” of interviews to win decent jobs with training programmes and promotion prospects: in accountancy, law and banking, in industrial giants such as Shell and ICI, in Marks & Spencer, the BBC and elsewhere.
In those days, there was a benign balance: a far smaller number of university leavers matched by a far larger number of traineeships, offered by employers whose management planning was based on annual intakes of bright juniors eager to climb the ladder to seniority.
Fast forward to news that just 8,383 graduate roles were advertised in July, 45 per cent down on last year, while more than a quarter of a million school-leavers set off for “uni” with vanishing hope of conventional job offers when they emerge into the world of work in three or four years’ time. Set that alongside a statistic from the Centre for Social Justice earlier this year of 700,000 unjobbed UK graduates on welfare benefits and we can see the wider scale of a growing crisis.
Not only is there an unbridgeable imbalance of supply and demand in today’s graduate market; in most private-sector employers, there’s no longer a ladder and not much of a plan. On the young jobseekers’ side, there’s a debilitating sense that the whole system has turned against them. And I’m bound to ask whether some or all of this is the fault of my generation, the blessed baby boomers: what did we do to demolish the career paths of our grandchildren?
We know, or think we know, several reasons for the dismal twist of their prospects. Half a century ago, 8 per cent of us went to university; this year more than 40 per cent will do so, many to study “ologies” (criminology, anthropology, you name it) which lead towards tiny numbers of real jobs, not to mention those trigger words “media studies”.
The shift to higher education started by John Major by converting skills-based polytechnics to low-grade universities, and accelerated by Tony Blair, has produced a mass of youngsters unfit for a shrinking pool of work. Many universities themselves are heavily to blame, for packing students into worthless courses to avert the financial crunch such institutions deserve.
Secondly, of course, this issue is all about AI. A recruitment company chief spoke to me recently of “more and more grads with less valuable degrees entering an AI-versus-AI battlefield”, in which AI is used both to write applications and to assess them for jobs that can largely be done by AI anyway. In the law and accounting, almost all low-level work can be done quicker and better by computers. In the nebulous but increasingly ubiquitous field of “consultancy”, which often means little more than big-data analysis, the AI-powered laptop is now a quantum leap smarter than its graduate operator.
Third, the Labour Government has damaged an already fragile marketplace with its hike in employers’ NIC and enhancement of workplace rights. For small and medium-sized firms, those policies created two imperatives: to hold down the total wage bill by reducing planned recruitment, including apprenticeships as well as graduate posts; and to ensure the usefulness of any new hires by favouring applicants with proven experience, grads or not, over untried university leavers.
It’s true that the boomer cohort of bosses created the hollowed-out, cost-squeezed, non-hierarchical corporate model and its hire-and-fire culture which has destroyed traditional patterns of graduate recruitment. Companies no longer seek lifetime loyalty: they just want sharper performance and they don’t need to recruit tomorrow’s chiefs today because they can always headhunt top dogs from competitors.
One thing I suggest can’t be held against us oldies, however, is the accusation that we’re “job-blockers”, clinging to our desks when we should long ago have made way for the young. Wise employers ease underperformers out early but welcome those with energy to keep working into their sixties; a mix of age and experience is a good thing in any office. And some studies show positive correlation between older workers’ labour market participation and employment rates for the next generation: a healthy economy makes work for everyone who wants it.
Can today’s trends ever be reversed? For sure, there will never be another milk round. Graduates who may still be trying to earn a living in the mid-2070s will have to build portfolio careers that constantly adapt to a changing world. But universities, prodded or threatened by government, also need radical reform, so they produce resilient, flexible, entrepreneurial self-starters rather than fodder for benefits queue.
About the Author: Martin Vander Weyer is business editor of The Spectator
